Elon Musk Threatens To Leave The Twitter Deal

Twitter shares fell 5% Monday morning in the early trading session. The Twitter stock traded well below Musk’s offer of $54.20 per share, indicating investor doubts about the deal.

Parag Agrawal (Twitter’s CEO) has stood behind his company’s long-standing spam metric. The company released a statement Monday saying that it will continue to share information with Musk in order to complete the transaction according to the terms of the merger agreement.

According to the company, it plans to “close the transaction” and enforce the merger agreement at agreed terms and prices.

Musk claims that there are likely to be more spam accounts than previously thought, possibly as high as 90%. 

Musk previously stated that the acquisition cannot be moved forward until the company can prove its spam metric.

Wall Street analysts believe this is a buyer’s regret and an attempt to force Twitter to negotiate a lower price for its $44 billion deal. Since the beginning, there have been questions about Musk’s financing of the acquisition. In the midst of market turmoil, social media stocks have taken a significant hit in recent weeks.

Monday’s letter suggested that Twitter might be “withholding the requested information due to concern about what Mr. Musk will uncover from his own analysis of that data.”

Twitter claimed that it had tried to limit access to the information through a narrow interpretation of the merger agreement. This meant that the provision of the information would not fall within the scope of Twitter’s contractual requirements. The letter claimed that even with Twitter’s narrower definitions, it still had an obligation to provide the information.

Twitter previously disclosed in a separate security filing that Musk had waived the due diligence clause in the agreement that would have made it easier to withdraw from the deal; without it, Musk could face a harder climb and the possibility of litigation.

Musk made spambots on Twitter a central issue in his agreement to buy Twitter. Musk has promised to defeat them and “die trying,” just as he described Twitter to be vital to “the next generation of civilization.”